As NAFTA talks stall, Mexico raises minimum wage to $4.71 per day

MEXICO CITY (Reuters) - Mexico will raise its minimum wage to $4.71 per day next month, President Enrique Pena Nieto said on Tuesday, a 10 percent hike unlikely to satisfy U.S. and Canadian NAFTA negotiators who see low Mexican salaries as unfair competition.

Starting in December, Mexican workers will earn at least 88.36 pesos ($4.71) per day, up from 80.04 pesos.

During the renegotiation of the North American Free Trade Agreement, Mexico has come under criticism for poor worker conditions, which the United States and Canada say allow it to benefit disproportionately from the pact.

Along the border, U.S. average wages are about five times higher than Mexican wages, one of the largest per capita wage differentials of any land border on the planet.

“Let me tell you something, this is not a minor adjustment, considering that since this administration began almost five years ago the minimum salary was barely 60 pesos,” Pena Nieto said, adding there had been a 20 percent increase in the minimum wage in real terms since he took office in 2012.

But the pay increase did not impress Canadian union leader Jerry Dias.

“The bottom line is 10 percent of nothing is nothing,” he said in an interview. “Ten percent isn’t going to do a darn thing for the workers in Mexico. It’s almost insulting to Canada and the United State.”

Last month, Pena Nieto said he saw the renegotiation of NAFTA as an opportunity to improve conditions for workers, adding he does not want the country to compete on low salaries.

In a statement, business chamber Coparmex, a member of Mexico’s salary commission, called the increase a halfway measure and recommended raising wages further to 95.24 pesos.

It was not immediately clear why the commission decided against raising wages further, however Mexico’s inflation is at an eight-year high of 6.30 percent, more than double the central bank target of 3 percent.